Two hoa questions

Out of the 58 homes, did any of them have voting privileges suspended? If they did, this would decrease the number of votes entitled to be cast, which, in turn may impact the number needed for a quorum.

How many members provided proxies (which would count toward a quorum)?

Without the answer to those questions, it's unknown if a quorum was present or not.

If a quorum is not present, you are correct that the election should not have taken place. If an election did not take place, per VA law, § 13.1-857, the previous directors would have stayed in their position and continued serving unless they resigned. Once a vacancy is created by such a resignation, the remaining directors would have had the authority to appoint those willing to serve to fill the vacancy.

Interesting language. Difficult to interpret without seeing any other language re check signing. But based on what's presented, I'll give it a whirl:

Board may authorize Treasurer to be the second signer along with Prez on checks. That's all I see. I see no restriction on whether other board members can sign checks.

In my HOA, the Treasurer maintains our reserves checkbook. According to our financial ops manual, Treasurer approves all checks but cannot sign checks. All reserve checks require 2 signatures. So any 2 board members other than the Treasurer can sign.

This is an additional risk abatement measure because we do not want the person who approves to also be a signer.

I think that your language could apply to my situation. Treasurer could be a signer along with Prez if we allowed it, but we don't.

sounds to me like a 'typo' - reversed positions

treas should be responsible for money / checks with a counter-signature (usually the pres)

pres should be responsible for contracts and other corp signatures

True, the bank will not enforce an internal policy of two signatures.

The bank only cares if the signature on the check is the same as on the signature card. Additionally, they will only care about that if someone brings an issue to their attention that it might not be the same.

Two signatures on a check is an internal control. It helps expose issues if the Association sees that checks are not being counter signed. It's an internal control that may or may not help the Association.

Here's the senerio. We recently elected new bod members. There was no qorum present but the election was held anyway. Our first bod meeting it was suggested that a third signature be added to sign for checks. So all three bod members; President, Vice President and Treasure went down to the bank for signature cards. The reason for this decision was a director said that in the past vendors were not paid in a timely manner. I was the only one who voted no all the other bod's voted yes. So my question is if bylaws states 2 certain signatures then how can the bod make a motion and override what the bylaws reads?

Paul, you never answered by question about proxies being used or not. However, I'll take your post at face value that you had no quorum.

As I pointed out, the election should not have taken place if no quorum was present (well, at the very least, the election would not be binding). I also provided links and cited VA Statute on what occurs if an election isn't held - the existing board members remain in office.

Therefore, an additional question would be were new members elected to the board at your meeting? If yes, how many (compared to existing members being reelected)?

What I'm trying to point out is that even if the election should not have been held, the result could have been the same. The same Board members remaining in their seats and appointing the new people to vacancies. Again, if the election was held without a quorum, it wasn't proper. However, since the outcome might not have been any different, you may want to pick your battles.

Perhaps you might want to suggest that the members who were reelected officially appoint the new people to the board to fill the vacancies. This would bring the makeup of the Board into compliance with the Statute and the Associations work can continue.


That really isn't a bad idea. In my Association, we actually have all Directors on the signature card. This allows checks to be issued even if individuals are on vacation or traveling on business. Typically, it's the Treasurer and President that sign our checks, but others can sign as needed.


As I previously pointed out, the language in your Bylaws concerning signatures is open for interpretation. If you want to be safe, you could motion that the Board seek a legal opinion. However, that opinion will cost the Association some funds.

The last opinion we obtained from our attorney cost us $600 (and that was for two simple questions). The opinion actually confirmed what the majority believed anyway. Therefore, one could argue if the cost was worth the opinion.

Since your Bylaw language is open for interpretation, my suggestion would be that you skip a legal opinion and offer a proposed amendment that has language that is more clear but still allows to address paying your contractors in a timely manner. The following is the language we used for our amendment:

Check Signature Requirements All checks issued by the Association shall be signed by two (2) officers of the Association.

Hope this helps,

Tim

We go one step further John.

Treas approves payment and makes out check.
But Treas is our only board member who is not authorized to sign.
Must get 2 other board members to sign.
That way, 3 directors must be in collusion to rip off the HOA. Not likely to happen.

Most of the non profits I have worked with or for have this policy. The exception is if outside vendor is keeping the books then Treasurer can sign. It is best that anyone who handles deposits and does the accounting not be able to sign checks. Some banks will check for the two signatures and some will not. In past I have had calls when accidentally had only one signature from other officers that the bank had a temporary hold and seeking verbal confirmation if ok to release funds.